Energy Stocks Steady Amid Macro Chaos; Sunday Night Earnings Surprise Ahead

• Japan's bond market saw historic volatility with 40-year yields hitting record 4.20% and 30-year rates jumping 27 basis points to 3.88%, ahead of upcoming Bank of Japan policy decision
• Natural gas prices surged nearly 30% on forecasts of extreme cold weather threatening power grids from Texas to Mid-Atlantic, contrasting with oil prices near five-year lows at $2.82 per gallon
• XOM and CVX stocks gained almost 9% in 2026, outpacing S&P 500 by eight percentage points, offering dividend yields of 3.2% and 4.1% respectively; Venezuela operations remain long-term opportunity requiring years to develop

Summary

Energy stocks demonstrated resilience amid broad market volatility, with the Energy Select Sector SPDR ETF (XLE) leading all 11 S&P 500 sector funds with year-to-date gains exceeding 6%. Ten of eleven sectors traded in the red during Monday's session, with Energy as the sole outperformer.

Key Market Developments

The VIX volatility index spiked above 20 while the U.S. Dollar Index suffered its worst session since August. Japan's bond market experienced significant stress, with 40-year yields reaching record highs above 4.20% and 30-year rates jumping 27 basis points to 3.88%, raising concerns ahead of upcoming Bank of Japan and Federal Reserve policy meetings.

Energy Market Dynamics

Oil prices remain under pressure from global oversupply, with President Trump's "drill, baby, drill" policy and OPEC's supply-demand challenges keeping bears in control. AAA reports regular unleaded gasoline averaging $2.82 per gallon, near five-year lows. Conversely, natural gas markets surged, with February 2026 Henry Hub contracts jumping nearly 30% on forecasts of severe late-January cold.

Upcoming Earnings

Baker Hughes (BKR) reports Q4 results Sunday night, January 25, with expected volatility of 4.8%. Other major reports include SLB Corp (formerly Schlumberger) on Friday and industry heavyweights Exxon Mobil (XOM) and Chevron (CVX) on January 30. Both XOM and CVX are up approximately 9% year-to-date, outperforming the S&P 500 by over eight percentage points, offering dividend yields of 3.2% and 4.1% respectively.

Investor focus centers on executive commentary regarding Venezuela following the Maduro capture and long-term opportunities in South American energy development.